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Government: The House GOP yanks away the payroll-tax football

December 19, 2011 | 11:22 am

House Speaker John Boehner
Is Congress dysfunctional because the majority in one chamber -- House Republicans -- insist on squeezing every possible bit of leverage out of looming deadlines?

This Congress crossed the line into dysfunctional territory on the debt-ceiling debate, when the brinksmanship needlessly raised questions about the safety and soundness of Treasury notes and other federal obligations. And it may cross it again this month, if it can't agree on three major but temporary initiatives that are set to expire Dec. 31: lowering the payroll tax rate paid by employees, offering extra benefits for the long-term unemployed and protecting Medicare doctors from a sizable cut in fees.

It's not dysfunctional to oppose extending the payroll-tax cut or federal unemployment benefits. Some conservatives argue that the payroll tax should be allowed to rise back to its usual level (6.2%, from the current 4.2%), and I'm sympathetic. Some also argue that the extended unemployment benefits encourage people not to look for work, and although I think the data show otherwise, I recognize that there's a legitimate argument to be made on that front.

What would be dysfunctional is if Congress failed to extend the tax cut, the unemployment benefits and the "doc fix" for Medicare when a clear majority in both chambers wanted to do so. That's where lawmakers seem to be headed after House Speaker John Boehner (R-Ohio, pictured above) announced that the Senate's approach -- a two-month extension to buy lawmakers more time to reach agreement on a longer-term package -- was unacceptable.

It's entirely possible that Republicans in the House are just being crafty. They recognize that Democrats and the White House are more eager to extend the payroll tax cuts and unemployment benefits than they are. With two weeks left on the calendar, they sense that there's a chance to extract more concessions. So what if lawmakers have to work through the Christmas break?

On the other hand, it's also possible that many of the less senior Republicans in the House don't accept the notions of compromise and incremental progress toward a goal. And given the gulf separating Republicans and Democrats on economic issues, it seems quixotic at best to think anything more than incremental progress is possible in this Congress.

The Senate proposal is unmistakably an incremental win for the House GOP. It would force the administration to approve or deny the controversial Keystone XL pipeline project within 60 days, rather than waiting until after the election. That's huge for Republicans, politically, regardless of what the administration decides about the pipeline. And it would force Fannie Mae and Freddie Mac to charge higher fees to guarantee mortgages, reducing the implicit federal subsidy, leveling the playing field with unsubsidized competitors and reducing taxpayer risk.

But what do you think? Take our egregiously unscientific poll, leave a comment or do both!


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How badly do Democrats want that payroll tax cut?

-- Jon Healey

Credit: Andrew Harrer / Bloomberg

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